Estimates and the Actual Cost of War in Iraq

Before the United States invaded Iraq in March 2003, the budget director of the Bush administration had predicted that the war would cost between $50 and $60 billion1 (Bennis et al, 2005) while most independent estimates of the cost of the war suggested that the U.S. would have to spend somewhere between $ 50 and $ 150 billion on the war effort

There is no consensus on the extent to which the costs of the Iraq War impact the US economy. The neoconservatives, with their foreign policy agenda of unilateralism, making the United States an imperialist power and setting up a "model of democracy" in the Middle East, consider the cost of the Iraq War a small price to pay for such "lofty" objectives. They insist that the War has achieved its major goals of liberating Iraq from tyranny, and providing an example of democracy in "America's image" in the heart of the Islamic world.3 In order to justify the invasion of Iraq, the neocons and their supporters in the US administration tended to low-ball the cost estimates of the Iraq War. Faced with the spiraling cost they still consider it as a long-term investment for the promotion of free-trade and a globalized world which would ultimately benefit the US economy.

According to a recent report by Linda Bilmes7 in the New York Times, the biggest long-term costs of the Iraq War are the disability and health payments for returning troops. Such costs are likely to run at $7 billion a year for the next 45 years, which adds up to a total of $ 315 billion. The continuing conflict in Iraq is also believed to have played a part in doubling the price of oil from $30 a barrel prior to the US invasion to well over $60 a barrel today. Such a high price of oil adversely affects the US economy as each $5 increase in the price of oil is estimated to reduce the country's income by about $17 billion a year. (Bilmes, 2005)

Other effects of the Iraq War on the US economy include the loss in income for the families of the National Guard soldiers and reservists called up for duty in Iraq6 since the military salaries of such personnel is lower than their civilian salaries by an average of about $ $4000 per year. (Bennis et al, 2005, p. 13) The part-time soldiers also face problems in getting their jobs back when they return from their military duties abroad although a Reemployment Rights Act prohibits such discrimination by the employers. A number of small businesses in the US who lose their employees in the war effort are also likely to suffer economically.

. (Surowiecki, 2003) The leading proponents of the war, namely the neoconservatives, considered the amount to be mere peanuts for the broader political gains which the United States was supposed to achieve from the invasion. The amount of 50 and 150 billion dollars were considered q

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